Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

Re:Launch HN: Kalshi (YC W19) – A regulated exchange for tra... by nl on Monday November 21, 2022 @06:28PM (#33699677)

There are a vast number of use cases here. A simple one is the peak mortgage rate market[1]. That allows you to create hedges against movement on variable rate homeloans directly.

There's a number of unemployment-related markets that allow you to create insurance for yourself against unemployment.

And these are just things I've thought up of in a couple of minutes, not even considering what actual financial markets might want to use them for.

[1] https://kalshi.com/events/FRMMAX-22DEC29/markets/FRMMAX-22DE...

[ Parent | on HN ]

Re:Launch HN: Kalshi (YC W19) – A regulated exchange for tra... by renewiltord on Monday November 21, 2022 @08:29PM (#33700661)

That's neat but how does one hedge a $800k loan with a max position of $25k? Idea seems spurious. The difference is substantially higher. Compare a pre-hike 2.8% with a present 6.8%. Your $25k hedge is going to be pointless.

[ Parent | on HN ]

Re:Launch HN: Kalshi (YC W19) – A regulated exchange for tra... by tmansour on Tuesday November 22, 2022 @05:49PM (#33712675)

It's 25k downside exposure limit (doesn't mean your upside is capped at 25k).

Also even if you can't hedge the exposure in its totality, it is still worth hedging a fraction of it. "Under-hedging" is a common term in commodities markets - people often want to cover a portion of their exposure and leave the rest in the hands of mother nature.

[ Parent | on HN ]

Re:Launch HN: Kalshi (YC W19) – A regulated exchange for tra... by renewiltord on Tuesday November 22, 2022 @06:00PM (#33712771)

Useful to know.

[ Parent | on HN ]

Re:Launch HN: Kalshi (YC W19) – A regulated exchange for tra... by tmansour on Tuesday November 22, 2022 @05:48PM (#33712652)

+1 on this answer - there's a ton more examples here: student loans, climate policy, hurricanes, inflation, etc.

[ Parent | on HN ]